Dreamfolks Services Ltd, once India’s largest airport lounge aggregator, has announced the shutdown of its domestic lounge access business. The decision marks a major shift for the company, which until now derived nearly 93% of its revenue from lounge services.
Following the announcement, Dreamfolks’ shares slipped 5% to ₹131.07 on the National Stock Exchange on Wednesday.
Why did Dreamfolks exit the lounge business?
Dreamfolks’ core business model depended on partnerships with banks that offered complimentary airport lounge access to customers. However, competition has intensified as airport operators such as GMR-owned Encalm and Adani’s Semolina Kitchens began offering lounge access directly to banks, bypassing aggregators.
Several leading banks, including Axis Bank and ICICI Bank, have already shifted away from Dreamfolks. This erosion of both bank partnerships and lounge operator participation forced the company to pull out of the segment.
What does this mean for travellers?
Travellers who accessed airport lounges through cards still tied to Dreamfolks will no longer be able to use the service in India. Access will now depend on whether their bank has established direct partnerships with lounge operators. Until new tie-ups are finalized, some customers may temporarily lose lounge access.
Impact on business
Dreamfolks had earlier disclosed that 93% of its revenue came from lounges. With this service discontinued, the company faces the challenge of replacing over 90% of its business.
In FY25, the company reported revenue of ₹1,291.88 crore and a profit after tax of ₹65.05 crore. Analysts warn that sustaining profitability could be difficult without a strong alternative revenue stream.
What’s next for Dreamfolks?
The company is now looking to expand its portfolio of services beyond lounges. These include airport pick-up and drop facilities, visa application support, premium car services, wellness packages, coffee outlets, golf, and even access to railway lounges and social clubs.
Dreamfolks has also outlined plans to expand into Southeast Asia and the Middle East through strategic partnerships and acquisitions, though details remain under wraps.
While diversification may help, replacing its dominant lounge business will be a major challenge, analysts said.